The implications of both bad and good decision making in business is numerous – from starting up customer loyalty programs to instilling employee cutbacks; each one of these scenarios require rational decision making.
In the instance that a bad decision is made, a business not only stands to lose a huge amount of potential revenue but can even collapse and dissolve. However, good decision making in business is crucial to ensure the continuous survival of the business in question. In most instances, it is up to the manager or chief executive officer (CEO) to oversee all aspects of the business operation, and implement the necessary decisions that will help a business grow and increase its market share.
Although business wisdom may be hard to come by, employee feedback is highly valuable when it comes to implementing a core decision that will send ripples of changes undulating through the company. A good CEO will eagerly receive the counsel of other board members or even listen to feedback from subordinates before conducting any form changes or implementations. But a bad CEO relies solely on his own insight to perform a decision, and can put the company’s long-term interest at severe risk if a bad decision is made.
Thus, implementing the best decision and evaluating all the alternatives that would yield the best possible outcome for the company is the most crucial role of a CEO. Take workforce decisions, for example. Workforce decisions are the prime example of long-term strategic decisions that could either make or break a company. Installing cutbacks or increasing the workforce might sound easy, but all aspects of the decision must be considered. For example, ask yourself: will my company benefit from the increased workforce? Or will the increased amount of wages to pay drive down the profit margin of my company? Will employing a cutback and closing a department be enough to salvage the rest of the company? Or will the company be in further trouble due to the sudden decrease in workers?
These are key examples of questions that a manager or CEO must ask themselves every time they decide to implement a workforce decision. The same reasoning and pattern of logic applies to other situations as well. Therefore, good decision making in business is essential in ensuring that a business continues to succeed and rake in enough profits for future sustainability.
Decisions that are made hastily or without proper research or input stand to ruin an organization or business. Quick decisions usually cannot be undone unless great personal cost is involved, but lengthy decisions can also cause a company to go broke. Thus, good decision making in business involves decisions that can be made accurately within a stipulated time frame with minimal wastage of resources incurred along the way.
Another important tidbit in decision making is the morality behind each decision. Managers sometimes implement decision with less conviction, thus losing the trust and respect of their employees. Even the wrong decision stands a chance to garner the trust and respect of employees, if it is made with conviction. This form of leadership not only instills a sense of loyalty in stakeholders of a business, but also boosts the overall morale of the organization, thus stimulating people to be high performers and achievers.
Businesses also generally operate on four phases:
The Start-Up Phase
The Emerging Phase
The Growth Phase
The High-Growth Phase
As a CEO or manager, it is important to acknowledge which phase a business is currently presiding in. Young businesses in the throes of infancy are usually in the start-up phase, and it is vital to include the insight of experienced business mentors at this stage. A business that is slowly clambering up the growth ranks is in its emerging phase, and a business that is blooming is in the growth phase. High-growth phase refers to very successful business outlook, and often requires the counsel of the executive board members to debate the strategic plan and goals of the business as a whole.
Thus, it is crucial that good decisions are made during each phase to ensure that a business continues to expand and grow.
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